I don’t know about NJ, but in MA public transportation is partially funded by property taxes. Fares provide less than 1/3 of the operating costs. Subsidies also come from income taxes and sales taxes, neither of which the school pays. It provides a benefit to the school by being available for students and employees, shouldn’t the school pay their fair share like all non-nonprofits?
Of course, but businesses and other types of real estate pay property taxes as well which also go to fund the schools, as do people without kids, and they gain no direct benefit from public schools because they don’t have kids attending them. Why should their tax burden be increased just because something is a non-profit? Universities certainly benefit indirectly from public schools, just like businesses, that’s where their workers and customers come from.
That hospital is almost certainly a non-profit, which means it is being subsidized by all the taxpayers.</p>
Keeping in mind that the NJ Transit is subsidized primarily at the federal and state levels, the Northeast Corridor (the line that Princeton students use) pays for itself in passenger fares. Even if it didn’t, subsidies are federal/state - I’m not sure any part comes from local property taxes, if any. </p>
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The problem with this sort of argument, as other posters have claimed numerous times on here, is that it proves too much. According to your line of reasoning, ALL non-profits, including charitable organizations, must pay property tax. Such organizations employ people who utilize these public services as well. In fact, given that everybody uses public services to some extent (i.e. roads, schools, hospitals, etc.), then NO non-profit should be able to claim tax-exempt status. </p>
<p>Same with the hospital. All employees of non-profits will utilize the health care system in some way. So all non-profits should pay property taxes.</p>
<p>There is something inherently wrong with any argument that targets an entire class of organization in order to target a specific one, namely the University. Unless you’re claiming that all non-profits should pay property taxes, which nobody is actually doing in this case, then your argument fails.</p>
There is a marked difference, in my mind between a charitable organization and a non-profit organization. A good charity, IMO, returns the large majority of its revenue and endowment earnings <em>directly</em> to the community it serves, in one form or another. I have no problem with charities being exempt from property tax.</p>
<p>Princeton is not a charity. What direct public benefit are they providing? Sure, they educate a few kids, but if Princeton’s reason for existence is education, why aren’t they using that $17 bil endowment to open campuses all over the country and bring a Princeton-level education to 50,000 kids instead of 5,000? Why does Princeton charge tuition when for a tiny fraction of their endowment (around 1%) it could be free for everyone? </p>
<p>Why should people get a tax deduction for a donation to an institution that in its current form has more money than it will ever be able to use?</p>
<p>I think you can legitimately question whether they are in fact a non-profit.</p>
<p>In one of those documents I linked to, there were examples of hospitals that lost their tax-exempt status because they were found to not be providing sufficient public benefit to justify their status. If that light was shone on Princeton, does it pass?</p>
<p>Then you need to take it up with Congress, since the law only says that non-profits need to spend an average 5% of their endowment annually. And Congress makes no distinction about the “community it serves” unless that is part of its mission statement.</p>
<p>btw: “non-profit” does not mean no profit. :)</p>
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<p>I was hoping someone would go there: absent all of those marginal student riders, the average cost per ride would increase, which would increase the loss to the public.</p>
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<p>Yup, and all those employees who live in the 'hood pay rent to landlords or own their own homes, both of which already pay property tax.</p>
Please note that Princeton is a 501(c)(3) institution, covered as an EDUCATIONAL institution. The word of law clearly distinguishes between a tax-exempt educational institution and a charitable organization. That’s because the law recognizes education as a public good. Therefore, Princeton does not need to be a “charitable” organization to be tax-exempt. Your point is moot. </p>
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Education is a recognized public good. You forget that education is tied to research. The research that Princeton undergraduates, graduate students, and faculty produce certainly work towards the public good. Teach for America was an undergraduate thesis that a Princeton alumna made into reality. Alimta, an anti-cancer drug, was developed at Princeton. I hope you agree that these are public goods that have profound impacts on society. If you do not recognize these things as good, you should take it elsewhere, as the law is not ready to accept that view (and shows no inclination to abandon its view that education is a public good). </p>
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You are behind the times. Princeton did one better. Princeton is making an effort to make lectures and coursework available to all online ([Princeton</a> Alumni Weekly: Princeton joins consortium to offer free online classes](<a href=“Issues | Princeton Alumni Weekly”>Princeton joins consortium to offer free online classes | Princeton Alumni Weekly)). I only anticipate this growing. Opening campuses around the country can still only reach so many people. But putting it online can reach millions. And if you want a Princeton-quality education, it is free for you. You only pay to get the diploma. </p>
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The mere fact that Princeton has a lot of money is irrelevant. Education is a common good. If you think Princeton (or donations) should be taxed, you only join the increasing number of people who covet their neighbor’s wealth. “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal” (Matthew 6:19 KJV). </p>
<p>You are making arguments for the wrong cause. Nobody is making any serious contest that Princeton is not contributing to the public good. Rather, the point here is that it is making profits, even while it is contributing to the public good. Whether a property tax should be levied on the locales that make money for Princeton is the point of debate here.</p>
<p>I really don’t care what the Tax Code says, and whether a place like Princeton meets the letter of the law. I’m sure they have a whole team of lawyers guarding their precious 501c3 classification. I’m trying to argue a bigger point.</p>
<p>No one is arguing that education isn’t a “public good”, however at some point when the “good” becomes a tiny part of the whole, it should stop being subsidized by the public. When an organization like Princeton becomes large enough to afford it, I see no reason why they can’t contribute their share to society like every other business.</p>
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Maybe, maybe not. Maybe the T needs fewer trains and fewer employees, or get other savings by not having all those student passengers. And it doesn’t really matter - if you use something, you should pay for your share of it, whichever way the marginal costs go.</p>
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Please. 99% of the “research” that goes on at universities creates nothing more than an article in some obscure journal that 12 people will read. On the off chance they do produce something commercially viable they make a ton of money they are not paying taxes on, just because the rest of the organization meets some tax code. Is this the way it should be?</p>
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Do you not see the irony of using this verse to defend some of the most money-grubbing institutions around?</p>
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If they are making profits, and can contribute their fair share without jeopardizing the mission of the non-profit… why shouldn’t they?</p>
I realize that you’re arguing a bigger point, but I’m arguing a prudent point. The problem with your argument is where to draw the line. Where does an organization become big enough to “afford” itself. And how to draw that line within the confines of justice. The Red Cross is a big organization. The American Cancer Society is a big organization. I’m sure both could support themselves with donations, at the sacrifice of some other things. Just like how Princeton could support itself at the sacrifice of research funding. You’re seeking to redefine the tax system, which is not happening anytime soon. The closest we got was Herman Cain and look what happened to him. </p>
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You must make small steps before being ready to take the big leap. Or else you fall flat on your face. Everybody who makes huge discoveries has written a long chain of “obscure” articles that were relatively nonsignificant. But those are small steps to the bigger discoveries. For instance, my own research is going to be published in a small journal and will maybe get ten or twenty views, if I’m lucky. But that was never the point of it. The point was to push on, one step at a time, to finding a viable cure for cancer. And my “obscure” research was able to elucidate one mechanism in which, if drugs are inserted at a crucial step, cancer can be stopped. Unless you’ve had significant experience in research, I would not belittle people who have devoted their lives to taking those small steps in the right direction. Better than others who don’t take steps at all. </p>
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Simple math. Increased expense means less money in the bank. That trickles down to the research funds, financial aid awards, etc. </p>
<p>I am also interested in this: given you arguments, why should we not tax public institutions of higher learning too? They use public services and they also have property on which they make money. Especially the basketball/football powerhouses. They make money every year selling season passes and concessions. Since they are publicly funded, any attempt to tax them would result in the absurd notion of the government taxing itself.</p>
<p>But that sorta defeats your own point. If users pay their “share”, then property taxes would no longer be needed to support the bus/T lines. And thus, the PILOT for that service is no longer even a suggestion. (Of course, fares would increase, but that is exactly what would happen when ‘users’ pay their “share”.)</p>